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Larger impact of deferred maintenance

The battle for budget dollars is ever-present. There is no easy way through the difficult battle of jockeying for priority, especially when the solutions needing funding are not in direct line of sight for organizational leadership.

As budgets tighten up, there are several perceived “low hanging fruit” budget lines that tend to be targeted. HVAC Preventive Maintenance is one area most prone to budget cuts in a facility because of its perceived short-term financial benefit. Because of the high cost to maintain a facility, building maintenance is an easy area to cut, especially when a facility is running well. The problem comes when issues start to arise. Issues may start small but they can quickly escalate to larger issues if left unaddressed. Larger issues in facility operations usually come in the form of failing equipment which can cost tens of thousands or hundreds of thousands of dollars to repair.

Beyond the high equipment costs, there are many additional costs associated with deferred maintenance that can drastically increase the overall costs of reactive service.

REACTIVE REPAIRS COSTS MORE THAN PROACTIVE

  • LABOR COSTS ARE TYPICALLY HIGHER
    By its nature, reactive service only addresses issues when they become a problem. The downside to this type of response is that it is unpredictable both for the customer and the service provider. Because the issue is a surprise, the time it takes to identify and address a problem can be significantly longer than in a facility where preventive maintenance may have previously identified the problem.Without the ability to predict the failure, no backup plan for business continuity is in place, and a building can remain uncontrolled until such time as the service company is able to get on-site to assess the problem. This may be within a few hours, or a few days of the service call being placed. This delay can create lost productivity of building occupants
  • MATERIAL COSTS ARE TYPICALLY HIGHER
    When emergency repair is the only type of repair happening in a facility, the materials needed to accomplish the repair typically cost more than when repair work is planned and coordinated in advance.This is because the window of time available to price shop equipment and look into new, more efficient, or more economical replacement equipment is sacrificed, and the only solution considered is the one which fixes the problem as quickly as possible.The needed equipment may also need to be expedited in order to shorten system downtime but will translate to anywhere from a 100% to 500% increase in shipping charges. For heavy equipment, this cost increase can be significant.

SECONDARY COSTS ASSOCIATED WITH REACTIVE SERVICE

  • ORGANIZATIONAL OPERATING BUDGETS ARE HIGHER OVER THE LONG TERM
    Efficiency losses precede equipment failure and can stretch for months or years. While the failure of equipment may not happen for several years, the impact of failing equipment can lead to significant increases in energy used by failing equipment. Failing equipment must work harder to maintain system demands, and will waste energy in the effort to meet demand.When the failing equipment cannot meet demand, other equipment must pick up the load not covered. This equipment will use more energy in the process of meeting load demand and will experience a shortened lifecycle as it continually runs beyond its engineered capacity.Additional system equipment, which relies on demand-supply from the failing equipment for other system functions, will experience a reduction in supply and will work harder to maintain proper function. This process will also shorten their lifecycle as they work to maintain operational productivity that can’t be achieved due to failing equipment.Deferred maintenance and replacement of failing equipment can have a trickle-down effect through an entire HVAC system, reducing the lifecycle of equipment, and driving up energy costs in an effort to meet environmental demands.
  • UNPRODUCTIVE EQUIPMENT CREATES UNPRODUCTIVE OCCUPANTS
    As has been addressed in previous articles, Temperature Control and Humidity Control play a significant role in impacting productivity levels of building occupants. When HVAC equipment is incapable of properly controlling the building environment, it reduces the ability to provide optimal environmental conditions and reduces occupant productivity. This loss may be more incremental and harder to track, but given the significant cost for personnel and value gained by their productivity, the secondary costs associated with failing or neglected equipment can be significant.Whether an HVAC system’s impact is assessed as a purely operational expense, or as part of a larger network of interconnected efficiency and productivity measures, the costs associated with deferred maintenance can be significant.Shifting from a Reactive Service model to a Preventive or Proactive Service model can help better plan necessary repairs, better control the costs associated with those repairs, improve energy usage and energy costs in a facility, and improve the productivity of building occupants.

CM3 can help you plan a proactive service plan that better manages the efficiency and lifecycle of your HVAC system. Contact us today to discuss how you can get the most out of your system.

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